The European Space Agency got the green light on 21 November to push ahead with a new generation of launchers and take its first foray into manned spacecraft, with a €10 billion ($12.9 billion) budget agreement for the next five years.

Meeting in Naples, ministers in charge of space and science from the governments of the space agency's 20 member states broadly signed up to ESA proposals to improve its Ariane 5 heavy launcher, begin design of a successor - Ariane 6 - and design and build a service module for NASA's multi-purpose crew vehicle (MPCV) as part of ESA's "barter arrangement" to the running costs of the International Space Station.

The MPCV will be ESA's first work on a manned spacecraft, with director general Jean-Jacques Dordain saying work will begin immediately. Indeed, Dordain has a busy 18 months ahead as in 2014 he must present a detailed plan for the Ariane 6 rocket after ministers agreed to contribute €630 million during the next two years to cover early work on the project as well as the so-called "Ariane 5 Midlife Evolution" (ME), which aims to increase Ariane 5's payload by a fifth, to 12t to geostationary orbit, without increasing operating costs.

As with any pan-European project there is much horse trading over budget contributions and industrial benefits, with details of the agreement hammered out in Naples yet to be revealed. However, the fact that the New Launch System, as it was known until now, will be officially renamed Ariane 6 points to one enduring characteristic of ESA launcher programmes - who pays the bills calls the shots. In the case of ESA's big launcher, that continues to be France, which is contributing half of the Ariane 5 ME and Ariane 6 budget until 2014.

Another €80 million has been allocated to further work on ESA's new light launcher - Vega - which made its maiden flight in February and is expected to be a major player in the market to launch small scientific and Earth observation payloads.

The Vega Consolidation and Evolution Preparation Programme aims to lay ground for improvements post-2016, possibly including a new, all-European restartable upper stage - the current rocket uses the Ukrainian-made RD-689 - and bigger capacity. A further €70 million has been allocated to develop launcher technology not specifically aimed at any programme, such as propellant storage or hybrid propulsion.

Despite conceding the member states contribution agreement represents a "flat cash budget" during the next five years, Dordain says he "can manage with that", promising to continue his push to make ESA more efficient without cutting into the expertise he believes gives it the edge in technologies such as meteorological observation and deep-space exploration probes.

Moreover, he stresses, while the deal is for less than the €12 billion allocated by ministers in 2008, it represents a good result in economically challenging times. Critically, he says, it shows member states recognise space as an investment in their economies.

Dordain says ESA stands on three pillars: scientific research, return of technological competitiveness to member states, and development of technologies and infrastructure which provide valuable services to European citizens. The funding agreed supports those three pillars just about evenly, says Dordain.

And, he adds, with a five-year deal he is "more lucky than NASA", which has a yearly budget round to contend with. ESA money goes a long way too, he notes, given that manned spaceflight, which consumes half the budget of some of his peers, is not a high priority in Europe.

Overall, says Dordain: "The only dream I can have when I look at other space agencies is their budgets, but maybe not their results."

The headline figure of €10 billion - actually €10.119 billion - coming out of Naples this week may look slim compared with an ESA budget of roughly €4.02 billion for 2012 alone, but it must also be noted that this is not the total of ESA's resources for the period to 2017.

Apart from the prospect of further funds to be agreed for the Ariane projects in 2014, ESA gets a fair chunk of its budget from third parties, including the EU and European weather service Eumetsat which, under the terms agreed in Naples, will pay for a third Metop satellite after ESA funds the first two.

Indeed, that EU contribution could be set to rise dramatically. Under the terms of the Lisbon Treaty, which came into force in 2010, Brussels is granted "competency" over new areas, some of which will cross over into territory which until now has been the domain of ESA. Space will mostly remain the responsibility of EU member states, which operate through ESA as their intergovernmental agency. However, Brussels will be taking a more active role - which means not only taking some decision-making away from ESA, but also paying for some of its activities.

Thus, as important as this meeting in Naples has been, keen eyes will turn to Brussels on 11 December, when the EU council of ministers meets to begin hammering out the nature of its Lisbon-era relationship with ESA.

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